Hast the East Village Reached Developmental Capacity?

There aren't enough newer developments like this one to meet the current demand in the East Village. "It’s mostly six-story buildings," said Jeff Schleider from Miron Properties. "There’s a limited number of space right now.”

New Census data shows that the East Village has reached its developmental capacity, forcing newcomers to replace existing residents in older buildings instead of moving into modern apartments.

The Census reports that the number of occupied homes in the East Village has barely changed, though the neighborhood’s popularity has swelled in the last decade. As a result of rent restrictions and a lack of potential development sites in the area, increasing demand for apartments in the East Village has forced out some older residents and, in return, rent has soared.

Alex Karas, East Villager and real estate agent from Bond New York, said that there isn’t enough space in the neighborhood to meet demand.

“Not enough of it exists. We’ve had condos go up and nice rental buildings, but it seems like there’s more demand than supply at the moment,” Karas said.

Only 65 apartments were added since 2000 in one section of the neighborhood, from 1st Avenue to the Bowery and between 9th and 3rd Streets, according to the 2010 Census. The Census also revealed that the number of occupied residencies in the same area decreased by a miniscule .49 percent from 2000 to 2010. In another section of the East Village, from Avenue D to FDR Drive and between E. 6th and E. Houston Streets, occupied apartments increased by about 5.29 percent from 2000 to 2010.

The fixed number of occupied apartments in what five real estate agents insist is a popular market suggests that older residents may have been pushed out in the last decade with newer arrivals taking their place.

East Villager and managing director at Miron Properties, Jeff Schleider, said developers can’t build enough apartments for the increased demand because of long-time residents.

“There are limited places to build,” Schleider said. “Where there are existing buildings where new ones can be built, it’s just pretty tricky given the make-up of who’s in the building—including rent-stabilized and rent-controlled.”

Warner Lewis, an agent from Halstead Property’s office in the Village, said zoning can be an issue for developers.

“Everything is six-stories or under,” Lewis said. “The numbers are a lot tighter because, for people who are sitting on lots or buildings, there’s just not the predictive upside for developers to buy a plot and be able to build 15 to 20 stories and really just blow it out of the water.”

However, Schleider said that the city’s zoning restrictions aren’t a huge obstacle for developers interested in the area. In the East Village, zoning changes block-by-block, but in most places, Schleider said, developers are allowed to build six times up the floor area ratio of the lot, also known as R6.

“You’re allowed to build. You can get permission to build pretty decent sized buildings in the East Village, so the zoning isn’t that imposing,” he said. “The biggest challenge is finding new development sites.”

Karas said his richer clients would like to rent or own new apartments in the East Village, but he has a hard time finding listings.

Five real estate agents agreed that more of their clients are interested in the East Village, though some said there aren't a lot of luxury apartments available.

“There’s a market that’s not being met,” said Karas. “Because if we only have a sort of finite number of these luxury apartments in the East Village—and especially the part of the East Village that’s west, say, Lafayette, Bowery, Second Avenue—they’ve been at an absolute premium.”

Because few new buildings are appearing, rent has soared in apartments without restrictions.

“A lot of those Polish and Ukrainian residents who’ve lived there for a while are beginning to be pushed out,” Karas said.

Though newcomers must replace older residents in order to move to the East Village, Schleider still said he believed the almost stagnant Census occupancy data was incorrect.

“The Census numbers are skewed because certain demographics tend to not answer it,” Schleider said. He said that he thought the actual occupancy probably increased. “I imagine the [Census] numbers stayed about the same, but I bet [occupancy] went up a little bit—certainly not as much as other neighborhoods because there’s just not development space.”

Lewis said that newer residents might be more outgoing than their predecessors, making the East Village seem more occupied.

“Maybe the data doesn’t show that there’s a younger crowd of people just out-and-about more,” Lewis said. “The numbers must not have changed in the amount of people that live there, but the people who do live there are a younger more out-and about crowd.”

Note: The above article was originally written for my summer class’ blog, The Village Beat. My grandpa passed away and, as a result, I wasn’t in New York in order to complete the article to my class blog’s standards. I am really proud of this article and feel that it’s good enough for this blog at least.